Service tax leviable on works contract service other than commercial nature rendered to Government

Raju Construction Vs Government of India (Madras High Court)

Madras High Court held that works contract service other than commercial nature rendered to the Government, Local Bodies, Statutory Authorities etc. is liable to service tax.

Facts- Writ Petition filed under Article 226 of the Constitution of India for issuance of a Writ of Certiorarified Mandamus, to call for the records on the file of the first respondent in respect of issue of the Notification No.6/2015-Service Tax, dated 01.03.2015 in respect of Serial No.1(ii) alone published in Gazette of India Extraordinary Part II – Section 3 – Sub Section (i) No.120 on 01.03.2015 and quash the same and consequently to direct the first respondent to grant exemption to the petitioner from paying the service tax in respect of the works contract service other than commercial nature rendered to the Government, Local Bodies, Statutory Authorities etc. with effect from 01.04.2015.

Conclusion- Reference to Article 289 of the Constitution of India is misplaced and is of no significance as it deals with exemption of property and income of a State or Union Territory. It has nothing to do with levy of service tax under the provisions of the Finance Act, 1994. The service provided by the Government has already been exempted under the negative list. The service provided by the petitioners to the Government is not in the negative list.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

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